Dell shares climb after company raises full-year profit outlook on AI demand

Dell Technologies experienced a surge in its stock value during after-hours trading on Thursday, following an upward revision of its full-year earnings forecast and a robust outlook for the upcoming quarter. Despite falling short of LSEG estimates for adjusted earnings per share, the company reported revenues that aligned with projections. Dell anticipates earnings of $2.25 per share for the current quarter, alongside projected revenues between $28.5 billion and $29.5 billion, significantly exceeding market expectations. This optimism is largely attributed to $7 billion in anticipated shipments of high-margin artificial intelligence systems, which are expected to dominate sales in the coming months. For the entire fiscal year, Dell maintains its revenue forecast at approximately $103 billion, consistent with LSEG expectations, but has increased its earnings guidance to $9.40 per share, reflecting a 10-cent raise from prior estimates. As a key player in Nvidia's ecosystem, Dell is witnessing unprecedented demand for its AI systems, particularly from secondary cloud providers like Coreweave. The company reported a staggering $14.4 billion in confirmed AI system orders in its backlog, projected to ship in the upcoming quarters. In the first quarter alone, Dell secured $12.1 billion in confirmed AI orders, which will contribute to future revenue upon delivery. Earlier this year, Dell projected a rise in AI server sales to $15 billion for fiscal 2026, up from $10 billion in the previous year. Overall, the company's revenue increased by 5% year-over-year, with expectations for an 8% growth throughout the fiscal year. Dell's Infrastructure Solutions Group reported $10.3 billion in sales this quarter, marking a 12% rise, with $6.3 billion coming from server and networking sales and $4 billion from data storage solutions. Additionally, the Client Solutions Group, which encompasses laptops and PCs, achieved $12.5 billion in sales, buoyed by a recovering global PC market. The company also significantly enhanced its shareholder returns, allocating $2.4 billion towards share buybacks and dividends during the quarter, and a total of $2.58 billion throughout fiscal 2025, which concluded in January.